Invesco’s Corporate Bond and Sterling Bond funds were both downgraded from AAA to A, while its Monthly Income Plus offering dropped from Plus AA to A, which Square Mile refrained from suspending as its conviction is “based on the credit selection capability of the analyst team”.
It also cited comfort with manager Michael Matthews, who has managed the Corporate and Sterling Bond funds since 2013 and 2006 respectively.
However, the research house suspended its ratings on the Tactical Bond and Distribution funds as the departure of Causer is “likely to be more heavily felt in those funds where asset allocation is more significant to the way the funds are managed”.
TM CRUX European also suffered a downgrade from AAA to AA, which was attributed to disappointing fund performance since inception, although Square Mile asserted its conviction in the managers.
The firm explained: “Although the analysts believe that the reasons for its underperformance are understandable given the market conditions in recent years, they would like to see the fund make significant performance progress and ultimately demonstrate that the investment approach can deliver over time.”
TwentyFour Asset Management has retained all four of its ratings following its acquisition by Vontobel Asset Management, with the Monument Bond (AA), Strategic Income (A), Corporate Bond (A) and Absolute Credit Return (A) funds all holding steady.
Square Mile determined the TwentyFour AM business remains “operationally independent” following the acquisition.
Aviva Investors UK Listed Equity Income fund has also retained its A rating, despite the departure of equities CIO David Cumming and the “at risk” positions within the equities team.
BNY Mellon Sustainable Global Dynamic Bond fund has been upgraded to a Responsible AA rating and was described as a “well-balanced sustainable bond fund” that uses “diversified sources of returns with a focus on downside risk”.
Three funds have been awarded new ratings, with Ninety One Global Environment, Vanguard Global Small-Cap Index and Artemis Corporate Bond all receiving accolades in June.
Ninety One’s offering has received a Responsible A rating thanks to the “highly credible proposition” built by co-managers Deirdre Cooper and Graeme Baker and its best-in-class impact reporting.
The Vanguard Global Small-Cap Index fund now features a Recommended rating and is described as an option for passive exposure to global small caps, although Square Mile cautioned that the asset class is volatile, and the fund is not currency hedged.
Artemis Corporate Bond fund has been awarded a AA rating for its ability to “deliver alpha without any particular style bias”.